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Political and economic stability key to FDI

Dubai: Political and economic stability is the main factor that insure the inflow of foreign direct investment (FDI), Sultan Bin Saeed Al Mansouri, UAE minister of Economy, said at the Annual Investment Meeting 2014 (AIM).

“Political and economic stability are always in our forefront which determine when and where to go for any investment,” he added during a panel discussing at AIM.

Al Mansouri clarified that political stability for any country is not only a place free of wars or upheavals but it is meant to be government stability with a unified and stable decision-making.

He also added that regulation and good governance are another main factors that affect the FDI inflows. “Investors are targeting certain countries for their investments that have clear regulatory framework to protect their investments,” Al Mansouri said.

Investors prefer to deal with countries where a transparent financial system is in place and able to securitise the process of investors’ financial transactions, he added.

Yegor Borisov, President of the Sakha Republic in the Russian Federation, ensured that regulatory framework for FDI is the parameters for the inflow of these investments. “Regulatory frameworks should be the world practices in such competitive markets which help to be more protective for FDI inflows.”

Mustafa Othman Esmail, Minster of Investment in Sudan, said that most of the developing countries which really need the flows of FDI are lacking this regulatory framework. “It is also very difficult and challenging to find out this regulatory framework; thus government in the developing countries have to go for other incentives and mechanism to attract the FDI inflows.”

Governments in the developing countries should work on legal and administrative reformation to protect FDI and to compete with the grand markets, He added.